Saudi-backed LIV golf is nothing to be upset about
Bloomberg Opinion August 18, 2022
Saudi Arabia is using golf to boost its presence on the global stage. Its new sovereign wealth fund-financed LIV Golf tour launched this June, and many people remain unhappy. The criticisms from the worlds of politics and golf suggest the sport will be turned into a vehicle for Saudi political ambitions. And not everyone likes the recipe of faster play and an atmosphere that is party-like rather than stodgy.
In contrast, I think everything will be just fine.
LIV is throwing lots of cash around, and that has stimulated feelings of envy among some players, and fear at the PGA that it might be outcompeted. The new tour would spend at least $2.4 billion over the next four years, a lot of money in the golf world. LIV also is fronting Phil Mickelson — a golf superstar — about $200 million to participate in the tour.
The nonprofit PGA consortium, the dominant force in professional golf, is overdue for some well-financed competition. The PGA has responded to the new Saudi project by forbidding its players from participating. Perhaps that is a violation of antitrust law, but at the very least it is a further sign that many things in the golf world need some shaking up.
Is the new golf project an attempt to whitewash the reputation of Saudi Arabia? Former President Donald Trump said it would be “great publicity” for the Saudis, and plausibly that is one motive for the investment. But Saudi Arabian money has already been accepted by plenty of other people, in sports and elsewhere. The U.K. soccer (or rather, football) team Newcastle United is a Saudi-backed club, but that seems — properly — to be no major source of controversy. A lot of Saudi investment flows into venture capital companies, enabling the tech products consumers enjoy. Few people seem to mind this or even know about it, though it received a squib of attention when a Saudi prince backed Elon Musk’s bid for Twitter. Why should golf be different?
People accept foreign investment from other countries all the time, including from countries many find objectionable. A Russian oligarch used to own the Brooklyn Nets, a U.S. basketball team. They now are owned by Joe Tsai of Alibaba Group, who has criticized the Hong Kong “separatist” movement. I haven’t noticed that such ownership has made autocracy more popular in Brooklyn.
America buys plenty of oil from Saudi Arabia — and has done so for a long time. It is strange to take their oil but not accept their golf investments, especially when the former involves so many complicated concerns connected to both foreign policy and climate change.
Perhaps the problem is that the Saudis will so visibly be the major force behind the new golf league. But is that such a major corruption of the American social fabric? Golf is played by only about 8% of the American population.
It may be that both golf and the Saudis come under more scrutiny, and golf ends up being seen as less cool. Maybe the Saudis will end up being seen as less cool, too. Martin Gurri, a former CIA analyst, has stressed that attention these days often results in a more negative reputation, no matter what reputation may be deserved. Let the chips fall where they may.
I am well aware of the Saudi human rights record, including the murder of a U.S. journalist in 2018 and the unjust execution of 81 prisoners in one day earlier this year. But I also see the Kingdom as capable of change; for instance, in recent years women in the country have gained more legal protections.
I am reminded of my own history as a champion chess player, earlier in my life. I eagerly followed Soviet and communist bloc chess tournaments, using those tournaments as an occasion to ponder the bad (and occasionally good) sides of Soviet life.
In any case, there is no guarantee the new golf project will succeed, as most new projects and most new leagues end up failing. So far LIV Golf has failed to win an all-important TV contract, so it is hardly on a steady path to assured dominance or even survival.
There is plenty about the Saudi regime to be unhappy with, but their golf activities should be far from the top of that list.
Bloomberg Opinion columnist Tyler Cowen is a professor of economics at George Mason University and writes for the blog Marginal Revolution. This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.